Up to 800 staff will be laid off and 80 UK branches will be closed down following a "wide-ranging review" of the firm's plumbing and heating operations.
The £100 million investment will see a local network of 450 branches created, as well as a national network of approximately 80 larger branches, open seven days a week.
The company said: "The review has identified an opportunity to drive efficiencies and lower our cost base to strengthen the business. Regrettably, we expect this will result in the closure of around 80 branches across the UK and up to 800 redundancies.
"The reorganisation of our logistics and supply chain network, which we plan to complete over the next two years, will result in lower overall capacity requirements in our UK supply chain. This will enable us to operate from three regional distribution centres in the UK instead of four which will significantly reduce our operating costs.
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"On this basis, we propose to assess the feasibility of our Worcester DC as the changes in our plan are put in place. This means that whatever the outcome of the feasibility assessment, we believe that this part of our strategy will not impact roles or the number of roles until 2018."
Patrick Headon, Managing Director of Wolseley UK, said the firm is "committed to carrying out this programme as sensitively as possible, using voluntary means to achieve the proposed headcount reductions wherever possible".
"We have put the customer at the heart of this review with the aim of making Wolseley the first choice specialist merchant in our chosen markets," he said.
"We have a great business in the UK and there are continued opportunities for growth. I'm confident the transformation programme will drive better customer service and employee engagement and improve our financial returns."
In addition, the firm plans to spend £40m over the next three years to refurbish branches and to utilise modern technology.
In the US, Wolseley saw revenues grow 6.2% to £9,456 million for the year while trading profit rose to £775 million.
John Martin, Group Chief Executive, said: "Our review of UK operational strategy has identified opportunities to transform our customer propositions whilst simplifying our branch network and supporting logistics facilities to greatly improve service levels, drive availability and choice for customers and generate better returns for shareholders. Regrettably this will result in job losses which we will handle sensitively and minimise through redeployment and attrition as far as possible."
(LM/CD)
